The worldwide market for internet of things solutions will grow from US$1.9 trillion in 2013 to US$7.1 trillion in 2020, according to figures from IDC.

Over this period, IDC expects product offerings will be differentiated and competition will generally intensify, particularly around holistic solution offerings that incorporate smart analytics and applications.

IDC defines the internet of things as a network of networks of uniquely identifiable endpoints (or ‘things’) that communicate without human interaction using IP connectivity — whether locally or globally.

The research company predicts that the installed base of internet of things units will grow at a 17.5 percent CAGR over the forecast period to 28.1 billion in 2020. It estimates that, as of the end of 2013, there were 9.1 billion units installed.

The company also identifies the market challenges as competing priorities in developing regions, global scalability, privacy and security concerns, lack of standards and a nascent ecosystem for application development.

"The worldwide IoT market is exploding, and IDC's research examines the full breadth of its ecosystem, including intelligent and embedded systems shipments, connectivity services, infrastructure, purpose-built IoT platforms, applications, security, analytics, and professional services," added Carrie MacGillivray, Program Vice President, Mobile Services, IoT, and Network Infrastructure at IDC.

The internet of things is poised to help various industries. For example, in the retail industry, data analysed through intelligent systems will enable retailers to visualise emerging behavioural patterns and anticipate key industry trends to ensure they can quickly cater to demand and engage with customers, employees and partner networks in the most beneficial way.

Automotive manufacturers, for example, can communicate with customers when they are in their vehicle through a two-way in-car platform to provide value-added services, using vehicle related, location-specific, and consumer-context information. Or by equipping a tyre with a sensor, instead of selling the product, manufacturers can sell the miles their customers drive on it.

Another example is the smart TV where manufacturers can also sell services through the product and provide a rich connected experience.”